Cost-effectiveness of the top 100 drugs by public spending in Canada, 2015–2021: a repeated cross-sectional study

Presented at ISPOR 2024, May 5-8, 2024 and at CAHSPR 2024, May 14-16, 2024

Étienne Gaudette, Shirin Rizzardo, Yvonne Zhang, Mina Tadrous, and Kevin R. Pothier

Introduction

Objective: To assess the distribution and spending by cost-effectiveness category amongst those drugs with the highest public spending levels in Canada.

Approach: The share of public pharmaceutical spending allocated to cost-effective and cost-ineffective drugs was estimated using Canadian Agency for Drugs and Technologies in Health (CADTH) cost-effectiveness assessments and Canadian public plan spending data from six provinces.

Data

Public drug plans data: Spending data originated from the Canadian Institute for Health Information’s National Prescription Drug Utilization Information System (NPDUIS). The provincial public drug plans of Manitoba, Ontario, New Brunswick, Nova Scotia, Prince Edward Island, and Newfoundland were included in the analysis because they funded take-home cancer medications.

Main outcomes and measures: The key outcomes were the cost-effectiveness assessments for top-100 brand-name outpatient drugs by gross public plan spending in any fiscal year (i.e., April to March) between 2015 and 2021 and the gross public plan spending by cost-effectiveness category. Drug cost-effectiveness was assigned based on CADTH review type and finding within three categories:

Review type and finding Cost-effectiveness categorization

Cost-minimization analysis

Cost-decreasing

Cost-effective

Cost-increasing

Cost-ineffective

Cost-decreasing relative to some comparators and cost-increasing relative to others

Mixed/unclear

Inconclusive

Mixed/unclear

Incremental cost-utility analysis

Dominant

Cost-effective

ICUR < 2021 $Can 50,000

Cost-effective

ICUR > 2021 $Can 50,000

Cost-ineffective

Dominated

Cost-ineffective

Inconclusive

Mixed/unclear

Other

Mixed/unclear

No review identified

N/A

ICUR: incremental cost-utility ratio.

Results

There was a marked increase of top-100 drugs with a cost-ineffective assessment

Figure 1. Distribution of 100 highest-spending brand name drugs by cost-effectiveness category, 2015 to 2021

Figure - Text version
  2015 2016 2017 2018 2019 2020 2021
Not assessed 31 27 25 22 19 19 19
Mixed/unclear 22 22 21 18 18 17 16
Cost-ineffective 29 31 31 33 35 39 41
Cost-effective 18 20 23 27 28 25 24

Sources: Canadian Institute of Health Information (CIHI) data and Canadian Agency for Drugs and Technologies in Health (CADTH) reimbursement reviews.

The share of spending on cost-ineffective drugs grew by 50% from 2015 to 2021

Figure 2. Spending on 100 highest-spending brand name drugs by cost-effectiveness category, 2015 to 2021

Figure - Text version
  2015 2016 2017 2018 2019 2020 2021
Cost-effective 42% 41% 45% 46% 46% 42% 40%
Cost-ineffective 30% 36% 35% 36% 37% 42% 45%
Mixed/unclear 27% 24% 20% 19% 18% 16% 15%

Sources: Canadian Institute of Health Information (CIHI) data and Canadian Agency for Drugs and Technologies in Health (CADTH) reimbursement reviews.
Note: This figure excludes the drugs which have not been assessed by CADTH.

Conclusions

A significant and growing share of public drug spending in Canada was allocated to cost-ineffective drugs, which either increased costs relative to equivalent existing treatments or provided small added health benefits relative to their incremental cost. While some cost-ineffective drugs may provide clinically desirable treatment options to patients, allocating large budgets to such treatments prevents spending with greater health impact elsewhere in the healthcare system and could restrain the capacity to pay for truly groundbreaking pharmaceutical innovation in the future.

Limitations

As with all analyses of public spending on pharmaceuticals, our analysis valued drugs at list prices and did not have access to confidential discounts. The trends documented may have been impacted by shifts and improvements in CADTH processes over time, notably the shift to a greater use of incremental cost-utility analysis and the decline in the number of assessments with mixed or unclear results (Figure 3). CADTH does not recognize a formal threshold for cost-effectiveness for its analyses. Public consultations and the adoption of a formal value for Canada would help clarify the degree to which spending patterns were socially acceptable.

Figure 3. Distribution of 100 highest-spending brand name drugs by CADTH review type, 2015 and 2021

Figure - Text version
  2015 2021
Incremental cost-utility 26 48
Cost-minimization 36 30
Other type 7 3
Not reviewed 31 19

Recent publication

A more in-depth version of this research has recently been published in a peer-reviewed journal:
Gaudette É, Rizzardo S, Zhang Y, Pothier KR, Tadrous M. Cost-effectiveness of the top 100 drugs by public spending in Canada, 2015–2021: a repeated cross-sectional studyBMJ open. 2024 Mar 1;14(3):e082568.

Disclaimer

Although based in part on data provided by the Canadian Institute for Health Information (CIHI), the statements, findings, conclusions, views and opinions expressed in this report are exclusively those of the PMPRB.

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